Big Banks Ready to Dive Into Bitcoin as Regulatory Barriers Ease, Says Cantor Fitzgerald CEO

• Cantor Fitzgerald’s Howard Lutnick predicts banks will fully embrace Bitcoin once regulatory barriers are lifted.
• Lutnick states Bitcoin has been on the fringes of finance, but improved regulations could lead to rapid mainstream adoption.
• Traditional finance institutions are eager to engage with Bitcoin, but current regulations prevent banks from transacting in it.

Cantor Fitzgerald CEO Howard Lutnick has predicted that big banks will fully embrace Bitcoin once the regulatory environment improves. Lutnick pointed out that while Bitcoin has remained on the fringes of traditional finance, banks and financial institutions are eager to participate in the growing digital asset market. However, regulatory barriers are holding them back for now.

Traditional Finance Eager for New Asset Classes

Lutnick emphasized that traditional financial institutions, often referred to as “TradFi,” are eager to adopt Bitcoin as a new asset class. Notably, he stated, “Banks still can’t clear or transact in Bitcoin, and they won’t finance it yet.” 

This, he noted, is because regulatory frameworks require banks to set aside equivalent amounts of money to hold Bitcoin, making it impractical for them to do so at the moment. However, Lutnick believes that once regulators give the green light, banks will move quickly to integrate Bitcoin into their operations.

Bitcoin Has Been an Outsider, but Its Role Is Expanding

Over the past five years, Bitcoin has been considered an outsider in the world of traditional finance. However, Lutnick pointed out that the digital currency is gradually gaining acceptance. “Right now, there’s an ETF just starting to go mainstream,” he said, adding that this signals Bitcoin’s potential to become a part of the financial sector. Banks, however, remain cautious due to the lack of regulatory clarity, but Lutnick is confident that this will soon change.

Regulation Could Drive Bitcoin’s Next Major Surge

Lutnick explained that the key to Bitcoin’s future growth lies in how regulators classify the digital asset. Once regulatory bodies, like the CFTC, classify Bitcoin as a financial asset, the shift toward mainstream adoption could be rapid. 

“When that happens, you’re going to see Bitcoin move in a very, very strong, positive direction,” Lutnick said. Despite Bitcoin’s current price decline of 4.32% to $56,563.71, he remains optimistic about its long-term prospects. Bitcoin’s trajectory may hinge on regulatory frameworks, but traditional finance is prepared to dive in once the environment is favorable.